Contract trading is on a 7*24-hour round-the-clock trading, which will not be interrupted
unless it is in a settlement or delivery at 16:00(GMT+8) on every Friday. The duration
of interruption depends on the time taken by the system to conduct the settlement and delivery. The time for interruption and recovery is different among contract varieties, that is, if BTC is still in settlement while ETH is finished, then the recovery of ETH trading is ahead of BTC.
Position can be closed but not be opened in the last 10 minutes before the delivery.
Trading types can be divided into opening and closing positions. Each type can be further divided into two directions, long and short:
Open long position means that users buy a certain number of contracts when the index is bullish. When the transaction is concluded, long positions will increase.
Close long position means that users exits the market by offsetting owned buying contracts when the index is not bullish. When the transaction is concluded, long positions will decrease.
Open short position means that users sell a certain number of contracts when the index is bearish. When the transaction is concluded, short positions will increase.
Close short position means that users exit the market by offsetting the selling contract held currently when the index is not bearish. When the transaction is concluded, short positions will decrease.
Limit Order: Users need to specify their own prices and quantities. Both opening and closing positions can use limit order.
BBO Price Order (Best bid offer price Order): If a user places an order at BBO price, he only needs to enter quantity. The system will read the current latest price as soon as it receives this order (if the user buying, the BBO price is the price of selling 1; if the user selling, then the BBO price is the price of buying 1), and release a limit order of BBO price.
After opening positions, positions in the same type of contract and same direction will be merged. One contract account can only have up to 6 types of contracts, long/short position in weekly contracts, long/short positions in bi-weekly contracts, long/short position in quarterly contracts.
Limitation of positions and orders
Huobi DM limits users’ gross positions and quantities of orders, to prevent market manipulation.
- If the amount of positions or orders held by an account is too large and there is a risk of market manipulation, then Huobi DM has the right to require the user, including but not limit to: adopt to cancel orders or close positions, etc.Risk management measures of Huobi DM are including but not limit to: gross positions limit, orders limit, cancel orders, and liquidation, etc.
- Post only, also called "maker only", is used to place maker order only. The order limit for openning and closing are 500,000 Cont. respectively under each contract type( weekly, bi-weekly and quarterly). Besides, Post only order will be included to the user's position limit as well.
1. For the same type of contract, positions will be merged. If user first goes long a 1 BTC weekly contract, and then goes long a 2 BTC weekly contract, then he will own a 3 BTC weekly contract displayed at the positions;
2. For closing a position, the cost will be calculated by the Moving Average method. That is to say, it will not distinguish opening price of each position, but calculate gains with the average cost price of all positions.
For example, if a user opens a BTC weekly contract at the price of 1000 USD and opens another two BTC weekly contracts at the price of 1500 USD, then the average price of the positions held by the user is 100*(1+2)/(100/1000+200/1500)=1285.7 USD